As an idyllic, tropical holiday destination Koh Lanta is a contender for one of Asia’s hottest new tourist locations. With its choice of white sand beaches, proximity to world class dive sites and spectacular boat anchorage, its not hard to see why this island, located in Krabi Province on the southern most end of the Phra Nang peninsula, is attracting so much attention.

However, as an emerging market targeting foreign home buyers, Koh Lanta is struggling to address key accessibility and infrastructure issues, which are the main reason that no big-name residential development companies have yet introduced projects on the island.

That hasn’t stopped an influx of foreigners buying land and building homes on the island or the perception among locals that Koh Lanta is the “next big one”. Fueled by a growing popularity with Swedish nationals and the continuing arrival of new luxury resorts, this 80’s backpacker haven will undoubtedly soon change from what first attracted foreigners to this hidden gem.

Growth in Lanta’s tourism industry can best be measured by the increasing number of resorts popping up along the west coast. In 1986, just two beach bungalow resorts existed on the entire island, by 1999 approximately 30 low-end resorts had been built and today Koh Lanta has 200-plus places to stay.

A promised land is always full of opportunities. The reality now for Koh Lanta is that once the local government can solve the problem of actually getting people onto the island, nothing will hold back the throngs of tourists, developers and home buyers. Unfortunately these access issues may take up to five years to be solved.

Currently, getting to the island by car involves taking two car ferries, one between the Krabi mainland and Lanta Noi, and another connecting Lanta Noi to Lanta Yai, which is the 10-beach tourist island. Tidal fluctuations and mechanical malfunctions mean the journey between the new Krabi International Airport and resorts on Koh Lanta can take anything between 1 ½ hours and 4 hours – definitely a hard sell to travel weary Europeans and Asian Expats who want instant, tropical gratification.

Other methods of getting to the island include travelling on one of two daily passenger ferries (these run in high season only) from Krabi or Phi Phi Island or squeezed into a mini van, which also travels across on the dreaded car ferry. A bridge has been promised for one leg of the crossings within three years by Krabi governor Siwa Sirisawalak, but local people fear this will only create a bottleneck at the other ferry crossing.

Recently island residents raised questions as to the reasons behind the state´s reluctance to build a bridge linking the islands to the mainland. One operator has a monopoly on ferrying cars, so locals are always skeptical when asked about the reality of the bridge project. “They have been talking about these bridges since we opened”, says Franck de Lestapis, General Manger of the 5-star Pimalai Resort and Spa and the only company on the island developing luxury residential properties.

The bridge issue is not just vital for tourism and local Thai business, but also for foreign home buyers, especially in cases of emergency as the medical services available on the island are very limited. The issue also creates a wide range of development problems such as high building and material costs and a lack of direct access to western-style products and amenities.

While the island’s roadways, water and electrical systems have improved immensely over the past few years, Koh Lanta still doesn’t offer important amenities such as international schools, golf courses and shopping that many foreign home buyers in Thailand now demand.

In addition, the sudden influx of foreign money and property development means “positioned” locals are lining up to take advantage of the bounty. According to local lawyers, this is a concern for potential developers as the political hierarchy on the island has yet to be worked out and involves a tangled web of provincial, municipal and local politics that starts in Bangkok and winds through Krabi’s provincial land and revenue departments, ending with local families and village leaders.

Despite this downside, sales for mid-range homes on the island between 7 million and 15 million Baht are strong in a market primarily supported by Swedish people who have claimed the island as their own. In fact, out of the 10 property projects of note, most are Swedish-owned with the island´s two top real estate brokerages also run by people from Scandinavian countries.

Pimalai Pool Villa Development, the island´s only completed luxury residential property, sold out 40 units in just over two years at prices ranging between18.5 to 30 million Baht. About half were sold to Thai investors and half to foreigners.

However, for home buyers, choices are still limited in comparison with places like Phuket and Koh Samui. Most residential projects display less than sophisticated designs and are often developed by long term residents who, after years of being asked by foreigners where they can buy a home in Koh Lanta, started building them.

Koh Lanta land prices are another phenomenon. According to Merv Baines, a land expert who specializes in selling property in south Thailand for Indigo Real Estate, Lanta’s land prices don’t make sense. “While Koh Lanta is slowly emerging from its shell, it is still a long way from being born,” says Baines. “Unfortunately, local land owners have taken advantage of the current interest, mainly from the Scandinavian market, with land prices starting to rival sister island Phuket. But does this make sense when the nearest airport, proper hospital and shopping mall is possibly a four hour drive and two-ferry rides away?”

Obviously pioneers in this market, whether property developers or investors, see a window of opportunity while the island waits for its infrastructure to improve. However, like any developing real estate market Koh Lanta will continue to suffer growing pains as it tries to transform itself into a true international tourist and home buyer destination.

Duane Lennie is a 8-year resident of Koh Lanta and currently operates www.kolantarealestate.com

About the author

Duane
Lennie

Duane Lennie is a 8-year resident of Koh Lanta and currently operates www.kolantarealestate.com and is the Marketing and Communications Manager for Indigo Real Estate in Phuket.

2 responses to “Koh Lanta Property takes its first steps”

Hi there, for the past few years I have been interested in selling a property at home and purchasing a few rai in Koh Lanta. I have visited the island a handful of times now and have decided that within the next 18 months I will finally be ready to do so. I have friends who already have commercial and residential properties on the island and would definately like to join them soon! My budget is between $50-$100,000 and I plan on either building a couple luxury bungalows or a small commercial structure on the right piece of land. I will be back in Koh Lanta in July and again for a month in December to scope out prospective places. Could you please get back to me with any recommendations or info as it would be greatly appreciated. I plan on making the most of my 2 visits this year so if I could look at as many properties as possible I will have a better understanding of what exactly I want.

Thankyou Duane for your article, I would just like to add my review of the current situation and the resort.

Long, uncrowded beaches, crystal-clear water, and a laid-back natural environment are Koh Lanta’s main attractions. Early development resulted in the construction of hundreds of budget bungalows and several swanky resorts along the west coast of Lanta Yai (Lanta Noi’s coast is less suitable for development); however, as one of the largest islands in Thailand, Lanta was able to absorb the “boom” and therefore remains relatively uncluttered. In addition, Lanta is approximately 70 km (44 mi) south of Krabi Town, far enough outside established tourist circuits that visitor arrivals have increased more slowly than at other Krabi and Phang Nga beaches and islands.

The tsunami was a mixed blessing for Koh Lanta. It had a small effect on the buildings along the coast, and most damage was repaired within months of the disaster. However, it had a beneficial effect on the environment, cleansing the beaches and replenishing the shore with clear deep-ocean water. Before the tsunami it was hard to imagine how Koh Lanta could be any more beautiful, but afterwards the water was bluer and more sparkling, the sand whiter and softer.

Though the huge decrease in visitor arrivals to the island initially caused its share of economic hardship, it wasn’t long before word of Koh Lanta’s renewal spread and lucky travelers again found their way to its shores.